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Forex : Advice 3

The Forex price fluctuation may divide into the bullish trend, the bearish trend and the flat trend, never go against the trend. If having open position which is against the trend, stop loss, never open another position to pull the low average price position. Although there always an end for a trend, but one cannot predict the Forex high and low for a trend. The high and low is formed by the market forces. 

These make the single truth, many Forex traders knew it, but in the actual Forex trading, they actually repeated the same error, keep opening new position that against the trend in order to lower the average price. Resulting the first open position price is already few hundred or even thousand pips away from the current price. 

Some Forex traders often like to hedge when their position is on the losing side, they do it by buying or selling new position in order to lock in the original loss order. This technique is invested by Hong Kong and Taiwan's financial companies. Such technique work to balance Forex traders' psychology in facing losing orders, providing Forex traders more times to rethink their trading strategy. 

In fact, Forex traders after locking the orders, while reconsider their trading strategy, often have the instinct to settle the profitable order and keep losing order, not considering the market situation. This process will continue, Forex traders will relock and unlock the orders several times until the first order is already several thousands pips away from the current price. 

Many Forex traders always have such experience, waiting for the 'best time' to cut loss or liquidate position. While an order is losing few hundred pips and the 'best time' come with losses is only 20-30 pips, one might hoping to settle at break even level; and when break even level reach, one might hoping for 20-30 pips profit to exit the market. Lead by greediness, the 'best time' to exit market will never arrive. 

Learn to stop loss, cut the position, and admit you have done a mistake. There's always new opportunity as long as your margin is not tied with any open position.